Poorer families could be saving £36m a week with the right education
The study, funded by Santander, the Citizens Advice Bureau and the University of Bristol, showed that social housing tenants changed their spending behaviour after being given guidance and advice on how to manage their finances.
As a result of the training, 78% of participants changed their spending behaviour, making the average household £10 a week better off.
With the average household in the study having an income of £200 per week, this is the equivalent of a 5% increase in income.
The findings indicate that if similar training were offered to all 4.6m social housing households in the UK, the collective benefit could be as much as £36m per week.
Jaime Graham, director at Santander, said: “This project clearly shows the importance of financial education and the difference it can make to households on lower incomes.
“A comparison of the participants’ views before and after the project found that 71% of them were more financially confident as a result of the sessions.
“The tools and knowledge gained from the training will help them organise and manage their household budgets more effectively, equipping them with money skills for life.”
The project also led to tenants in the study either starting to save money each week (12%), or increasing the amount they saved (10%).
On average, these participants saved an additional £11 per week.
This is particularly significant when considering that the median annual income in social housing stands at £10,900 compared to the national figure of £23,320.
The study highlights that if this training was given out across the UK, it could lead to an overall increase in saving of £579m per year for all families in social housing.
Graham continued: “This research provides valuable learning for those organisations involved in financial education, including the government, the financial services sector and charities.
“We hope that the findings will be helpful in developing new training programmes, particularly those aimed at supporting people living on low incomes.”
Tracey Bleakley, chief executive of financial education charity pfeg (Personal Finance Education Group), thinks that enough is being done to ensure that households have the knowledge and skills they need to manage their finances.
Bleakley said: “We believe that financial education should start from an early age. That’s why we are campaigning for this vital life skill to be taught in every school and college in the UK, from the age of 4 right up to 19.
“With young people entering an economy in recession and the squeeze on household finances tightening all the time, there has never been a better time to talk about this issue. Financial education can make a real difference in helping to prepare young people to cope with what could be difficult times ahead.”